Tuesday, October 11, 2011

Occupy Wall Street: Should we join them?

I mentioned last night my misgivings with Herman Cain's comments about the Occupy Wall Street crowd. My misgivings arise because I'm convinced that there are valid reasons for protest over the corporate connections to the highest levels in our nation's government. The "big boys"--whose leaders are pulling down multi-hundred-million-dollar salaries and bonuses (largely paid for by government largesse)--get unbelievable bailouts, while the "little guys" are looked down upon as leeches on society if they dare ask for a few extra hundred dollars a month in benefits.

There is something seriously wrong, here, it seems to me.

I'd been thinking about these things anyway, but my mental cogwheels were sped up a bit last week when I listened to a brief commentary by linguist Geoff Nunberg on NPR's Fresh Air.
"'[C]lass warfare,'" he said, "has been on a tear in the language of the right" recently.
[I]t's used five times as often in The Wall Street Journal now [over 20 years after the Soviet Union collapsed] as it was 40 years ago [when the Soviet Union posed a credible threat to the United States and to western capitalism]. In fact, the phrase has actually become more frequent as the marginal tax rates have gone down. It's sort of a revenant, a specter that haunts the English language whenever appeals for making the rich pay more are heard in the land. . . .

Democrats react by dismissing the charge of class warfare as a tired Republican talking point, or by trying to turn it around on the rich, the way the old Socialists did.

During the 2000 election, Al Gore described the Bush tax program as "class warfare on behalf of billionaires." But the charge does tend to put Democrats on the defensive. As President Obama said when he announced his tax program, "This is not class warfare, it's math." But that approach doesn't always work in politics, where denials often are apt to raise suspicions rather than dispel them — as in "I did not have sexual relations with that woman" and "I am not a crook." . . .

In a speech the day after he announced his tax ideas, Obama said, "If asking a billionaire to pay the same rate as a plumber or a teacher makes me a warrior for the middle class, I wear that charge as a badge of honor." That may be just stump speechifying, but it also makes him the first Democratic politician who has ever accepted the label and invoked the rhetoric of war against the rich.

The tone is different on the right, too. . . .
And it is in what followed that I found my heart suddenly pumping in excitement. I thought Nunberg made a most amazing observation. (Please forgive my emphasizing what jumped out at me. Or, put another way: All emphases in what follows are mine; they were not in the original written version of what I heard on the air.)
The Republican leadership still warn against divisiveness and avoid talking about class explicitly, other than saying that we shouldn't be increasing taxes on the "job creators" but rather "broadening the base." But the conservative media and bloggers have been less circumspect about cleaving society in two. Some of them talk about an all-out war between the producer class and the moocher class. And Fox Business ran a series of segments last spring called "Entitlement Nation: Makers vs. Takers." It isn't entirely clear who the moochers and takers are, but everybody seems to define them as including the 51 percent of American households who don't pay federal taxes, along with those who receive Pell Grants and other forms of government assistance.

This . . . recalls another famous sentence from the Communist Manifesto: "Society is splitting more and more into two enemy camps, into a face-off between two huge classes." It's true that Marx and Engels would have wanted to draw the line in a different place and switch around those "maker" and "taker" place cards, and of course they were rooting for a different team. Still . . .

Yes. Who did Marx and Engels identify as the moochers, the takers, the non-productive? Wasn't it what we might call the "investor" class? The "makers" and "producers" were the "working" class, weren't they?

I found my head spinning at these thoughts! Whoa! Who are producers? And who are moochers? And even if and as we might all agree that welfare recipients are moochers and takers; are the Wall Street fat cats not moochers and takers as well? Why should they get a free pass?

Well, in the midst of all this smoke and steam that was blinding my eyes, I came across this article by Shah Gilani of Money Morning. The article was published last Friday morning:
Dear Occupy Wall Street: Will You Stand with Me?

Let me start by saying that I applaud your initiative. Grassroots protests are the essence of democracy. And as we've seen with the Tea Party movement and the Arab Spring, nonviolent protests are a powerful way to effect meaningful change.

Yet even though I'm 100% behind you in spirit, I can't fully support your cause.

Don't get me wrong, I want to join you. But I can't - not yet, anyway.

And the reason why I can't support your ultimate goals is a simple one: I don't know what they are.

So how about this? I'm going to tell you what I stand for. I'm going to tell you what my goals are. And if you agree, then we can stand together. And if you agree with me, I won't wait another minute before joining you whenever and wherever I'm needed.

So here it goes.

The reason I'm already leaning towards your side is that the fountainhead of your disgust seems to be "Wall Street."

Now, I don't know what Wall Street means to you. But to me, it means all the crony capitalists and market manipulators whose calculators and spreadsheets say the present value of their self-serving greed is worth discounting all of America's future.

That's the Wall Street that I'm committed to fighting - the Wall Street that's littered with greed and corruption.

But to me, the "Wall Street" we're fighting against is not synonymous with capitalists. The enemy we share doesn't include the entrepreneurs and self-starters that have built this country up brick by brick.

So if you think socialism is better than capitalism, you can count me out. If you think that redistributing earned income from hard working Americans to support lazy, self-indulgent, able-bodied crybabies is fair, count me out. If you think that making a lot of money, fairly and honestly, is un-American, count me out. And, if you're thinking about violence or destroying other people's property, count me out.

But if you're mad that Wall Street money has bought our Congress; if you're mad that there's an oligarchy of banker puppeteers pulling the strings of the U.S. Federal Reserve; if you're mad that Wall Street is hell-bent on toying with the stock market and turning the screws on fixed-income investors, parents, and retirees to expand their profit margins; and, if you are mad that "too-big-to-fail" banks can wreck the economy and get bailed out, only to become bigger bullies while tens of millions of Americans lose their homes, jobs, and retirement savings, then I am solidly with you.

And, if you're with me, we agree that we need to tear down Wall Street to rebuild Main Street!

That's where we stand, hopefully united.

Now let me offer up a list - a manifesto, if you will - that you may or may not choose to adopt. But remember, I'm not trying to hijack your movement. I just want to offer some vision and clarity.

So these are the goals I'd like for us all, as fed-up Americans, to undertake:
  • Break up too-big-to-fail banks so they aren't threatening our financial system .
  • Investigate failed banks for fraud, and indict and incarcerate guilty parties.
  • Scale banker bonuses progressively with long-vesting stock options.
  • Legislate pay claw-back provisions and criminal statutes for bad banker behavior.
  • Eliminate volatility-inducing high-frequency-trading and ETF program arbitrage.
  • Make all derivatives exchange traded, highly margined, and transparent.
  • Limit credit default swaps to two times the value of at-risk underlying credits.
  • Mandate exhaustive studies of the potential market impact of newly created financial products.
  • Create simple, effective, light-touch regulations with heavy criminal penalties .
  • Cap Wall Street's political contributions and make them transparent.
  • Audit the Federal Reserve and limit its lending to domestic banking institutions.
  • Give the Consumer Protection Finance Bureau (CPFB) criminal indictment powers, including over the Federal Reserve.
  • Make Wall Street answer to the needs of Main Street, not the other way around.
Please don't get me wrong. It's not that there aren't plenty of other things in the United States that need fixing. I think we'd all agree we need to simplify and "fairify" the tax code, if not throw it out altogether. But, your movement is Occupy Wall Street, so let's stick to that.

There's one last thing. I'm certain that with thousands of supporters you'll find a broad spectrum of ideas and beliefs. That we may be united in belief does not necessarily mean we are all alike .

Take me, for example. In some ways, I am a "Wall Street" guy, and in other ways I am one of the 99% you claim to represent. I want an opportunity to make a good living, honestly and fairly. But, like all of you, like all of America, I am sick and tired of the powerful, moneyed oligarchy that runs America profiteering off the backs of hard working Americans.

That's why we need strong, transparent and fair capital markets and honest, smart leaders. The two aren't incompatible.

So what I'm saying is that I'm ready to join your revolution, if you're ready to accept a Wall Street insider who's determined to restore the system's integrity - not destroy it.

And that's why you're going to hear more from me every week, as I call Wall Street's biggest players onto the carpet. And I can promise you this: Some of the indictments I make are going to shock you.


Shah Gilani

P.S. - Sign up now for Shah's Free Report "Blast Profits In the Eye of the Storm: 5 Ways To Trade the Coming EU Crisis - And Make A Killing" and join him on his new website Wall Street Insights and Indictments.
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